The owner of Solaire Resort and Casino fears that the supply of casinos in the Philippines is growing faster than customer demand.
On Thursday, Bloomberry Resorts Corp owner Enrique Razon Jr told reporters that Manila’s casino development is a case of “too many, too fast.” Bloomberry, the parent company of Solaire, reported a net loss of $72.8m last year, compared to a $91m profit in 2014, and Razon warned that the local casino market is “not growing as fast as the industry wants it to.”
Resorts World Manila, which opened in 2009, got its first real competitor in 2013 via Solaire’s launch, which was joined by Melco Crown Entertainment’s City of Dreams Manila the following year. Kazuo Okada’s Manila Bay Resorts is set to open at the end of this year, while Resorts World Bayshore will follow in 2018.
Manila Bay Resorts has previously stated that it plans to offer 500 gaming tables and 3k slots when it opens its doors, which will boost the existing market supply by 53%. Meanwhile, the double-whammy of Beijing’s corruption crackdown and a sluggish Chinese economy has slowed the flow of Chinese gambling tourists, leading to questions as to who will fill the seats at these new tables.
This week, Daiwa Securities Group analysts noted that Resorts World Manila’s 2015 gaming revenue was down 15% year-on-year while profits were down 26%, mainly due to increased competition. Daiwa’s note wondered “how quickly demand can match the new supply, and which existing operators will be taking the biggest hit in market share.”
Manila operators are attempting to refocus their efforts on luring local gamblers, and Razon, for one, remains optimistic about Solaire’s outlook. Razon told reporters this week that the costs and bad debts that dragged down 2015’s numbers were in the past, while also claiming that Solaire’s VIP volume was growing.
Serving the local market isn’t much of an option in Macau, where oversupply is also a concern. Macau welcomed two new mega-venues last year and three more will launch over the next 12 months, adding 12% more gaming table capacity in a market that has seen gaming revenue fall for 22 straight months.
